Play investor puts $2,500 into a life insurance policy that pays 8.5% simple annual interest if no additional investment is made into the policy how much accumulated interest should the investor except at the end of 10 years
10 * 0.085 * 2500
To calculate the accumulated interest on a life insurance policy, we can use the formula for simple interest:
Accumulated Interest = Principal (Initial Investment) × Interest Rate × Time
In this case, the principal (initial investment) is $2,500, the interest rate is 8.5% or 0.085 as a decimal, and the time is 10 years.
Accumulated Interest = $2,500 × 0.085 × 10
Let's calculate the result:
Accumulated Interest = $2,500 × 0.085 × 10
Accumulated Interest = $2,125
Therefore, the investor should expect to accumulate $2,125 of interest at the end of 10 years.